ORLANDO, Fla. – Between economic uncertainty and booming interest rates, the once red-hot housing market is starting to cool off.
Buying a home during the pandemic was extremely competitive as a combination of low mortgage rates, low inventory and high demand caused prices to spike — especially in Florida.
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It’s a completely different environment today, though. Inventory is up by more than 100% year-over-year, according to data from the Orlando Regional Realtor Association, while mortgage rates are 131% higher since this time last year.
Anchor Justin Warmoth sat down with Kristin Mazza, a real estate consultant for Keller Williams Heritage Realty, and Julia Bell, a branch leader at Movement Mortgage, on “The Weekly” to learn more about the market and what the higher interest rates mean for prospective home buyers.
“We are in a very normal interest rate environment,” Bell said. “What this does for potential buyers is gives them the opportunity to have the upper hand. It’ll be more competitive for them to purchase a property at a more reasonable price, and although it’s harder to qualify for financing because the rates are higher, it also puts them in a good position to possibly have sellers be a little more lenient on paying closing costs, pre-paid items, etc.”
But that higher rate is also pricing people out of homes they possibly could’ve afforded when interest rates were low.
For perspective, a monthly mortgage payment on a $350,000 home with today’s 7.2% interest rate, which is the bank national average, is around $800 more compared to when rates were 3.5%.
“The increase in the valuations from last year, I don’t want to say they’re a wash, but you have to take everything into consideration,” Mazza said. “A $400,000 house that really sold for $475,000 last year may be selling for $385,000 today. That delta between what it would’ve sold for in 2021 down to 2022 is proportionate.”
Watch the full interview in the video player above.
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